In House, Tirade on China, but a Vote to Keep Trade as It Is

By MICHAEL WINES

Published: July 21, 1995

WASHINGTON, July 20—
The House railed long and fervently today against China's arrest of Harry Wu, China's use of prisoners as factory workers, China's sale of missile blueprints to its allies and China's use of forced birth control.

But given the opportunity, it declined to show its displeasure in unmistakable fashion: by revoking China's preferred trading status with the United States.

It was either the triumph of sweet reason over emotion, as graybeards in both parties said, or a cave-in to multinational corporations and their hired influence-peddlers, as both left-wing Democrats and right-wing Republicans asserted.

By common agreement, it was the narrowest escape yet for advocates of unfettered trade with China, including the Clinton Administration and the Republican leadership on Capitol Hill.

By a deceptively large margin of 321 to 107, the House voted to kill a resolution that would have revoked China's status as a "most favored nation" in trade with the United States. Federal law demands that Congress review China's standing every year, and the Chinese have clung to their designation every year since the two nations opened economic ties in the 1970's.

But the House renewed the most-favored privilege only after it ordered the White House, by an even more lopsided 416-to-10 vote, to establish a Radio Free Asia and to report on its handling of major American grievances against the Chinese. That measure was a compromise between the advocates and opponents of China's preferred trading status.

Leaders on both sides said they had served notice that both parties were not merely unhappy with the Administration's reluctance to punish China for unacceptable acts, but outright distressed by the fact that China runs a vast trade surplus with the United States even as it ignores American protests over its behavior.

"Part of what we're doing is sending a message to China, and part is about the Administration," said Representative Nancy Pelosi, a California Democrat who favors revoking China's trade status, but agreed to the compromise legislation instead.

In truth, "most favored nation" status is not all that preferential; most nations enjoy the privilege. But not having it is a distinct disadvantage to an exporting nation: the tariff on sweaters and shoes shipped to the United States would leap from 6 percent to 60 percent, for example, and the levy on Christmas tree lights from 8 percent to 50 percent.

Officially, the White House took no position on the compromise bill. But its drafters said the Administration lobbied behind the scenes on its behalf, seeking to avert an uncomfortably close vote on revoking China's preferred trading status.

The White House was trying to find a way for Congress to vent its frustrations without forcing a change in Mr. Clinton's decision last year to separate human rights issues from trade relations.

After the vote this afternoon, Mickey Kantor, the United States trade representative and one of the officials who pressed Mr. Clinton to extend most-favored-nation status last year, said that balance had been achieved. "This signals the impatience of Congress and the Administration for China to begin to act responsibly globally and at home," he said today. But he said, "It also indicates we are ready to engage in political and economic terms."

Mr. Kantor contended that China would receive "a clear message" from the Congressional vote. Clearly, however, China may get another message: No matter how much it provokes Washington on the human rights front, Mr. Clinton has gone so far in keeping commerce and politics separate that Beijing need not fear a return to the old policy.

China would suffer from tariff increases if it lost its most-favored-nation status. Its trade surplus with the United States has ballooned from about $7 billion five years ago to an estimated $40 billion this year, second only to Japan.

Because of just that, politicians of all stripe find most-favored-nation status a tempting target whenever Chinese behavior falls below American -- or international -- standards.

Congress's majority of free-trade advocates and foreign-affairs moderates has always prevailed in the fight over China's trade standing, aided by a lobbying effort by aircraft makers, petrochemical companies and other firms with nascent business in China.

Last fall's Republican ascendancy brought a flock of economic populists into Representative Peter DeFazio's opposing camp. Mr. DeFazio, an Oregon Democrat, has campaigned vigorously against China's favored status. And although Republican leaders insist they would have won an up-or-down vote on the issue, they elected instead to strike a deal with the anti-China forces.

The legislation passed today censures China for a range of military, trade and human-rights offenses and orders the Clinton Administration to report every six months on how it has addressed them. It also would give the Administration three months to begin broadcasting pro-democracy programs into China. Representative Marcy Kaptur of Ohio, a Democrat against most-favored-nation status, said she and many other opponents come from districts where "people are victims of declining wages and economic power in this country."

Noting that millionaires comprise more than a third of the Senate and about a fifth of the House, she added: "The people who are paying the price for this aren't represented here."